A friend has been told by their real estate agent that they will need to pay the 12% agent's commission (ie 12% of the annual rental fee) on their new property. Is that normal? And is it always paid by the lessee and not the lessor?

Afraid so. It is always paid by the lessor but remember its only on the first years rent, if they stay a second or third year there is no commission. Also tell your friend to haggle the commission down, she maybe able to get it down to 8% if lucky.

Thanks for that! (I think they are negotiating this weekend)

They all ask for 12%, its on their association's "rate card". No one with a brain ever pays that much. If you hadn't noticed there are no shortage of estate agents in Istanbul and most are populated by a bunch of good for nothing rentiers who sit in their office drinking Cay and smoking cigarrettes all day. Despite what they say, the real standard is one months rent (appx what SM said above) and one can in some circumstances do better. It should also be noted that rarely do these guys have exclusives on the properties they represent, and if they try to get you to sign some crap before they show you apts, tell them you will not sign until your lawyer reviews it and that they need to supply you with a notar'd translation, that'll make them forget about it.